tv Squawk on the Street CNBC March 5, 2013 9:00am-12:00pm EST
central banks should do when the economy is not performing. we see most recently in japan, the japanese are doing what chairman bernanke had been suggesting for more than a dozen years they do, and it's called abe-nomics over there. it says that the central bank is going to get prices up, and the central bank can do a lot to get the economy in a higher agree by raising nominal growth. but i think for japan, like for the situation in the u.s., again, the central bank can buy time. but the key question for this new prime minister and his government in japan is, do they use that window of opportunity to drive structural change in the japanese economy. if they do, the experiment can end well, and that's in some sense what markets are counting on. >> what do we do about income disparity? if the government tries to redistribute, it doesn't work, does it? >> so, you know, when we talk about tax policy, changes in tax rates as was described over the debt limit, what's the first thing that we all ask ourselves
and "the new york times" runs? what are the distributional consequences? will the rich be paying more? what about the middle class? shouldn't we be having that same discussion in the conduct of monetary policy? if you think about this monetary policy, if you've got the freedom, like ken and stan, to devote huge amounts of money into liquid assets, to play the risk game, you're going to be a huge beneficiary. so this is in some sense a policy where we also need to think about the distributional consequences. and this is in some sense a transfer to people that are rich. >> trickle-down economics. >> stan calls this trickle-down economic policy. others can see if it worked in fiscal. we'll see if it works here. it's also a transfer to those who are imprudent to those pro are prudent. >> don't wait so long next time. it's been unbelievable having you. a great hour.
thank you. >> thanks, joe. thanks, becky. good to be here. >> andrew, we'll see you soon. make sure to join us tomorrow. "squawk on the street" is next. good tuesday morning. welcome to "squawk on the street." i'm melissa lee, along with carl quintanilla, jim cramer and david faber live from the new york stock exchange. just 37 points separate us from a record high on the dow jones industrial average. could we hit that today? let's see how we're setting up in the markets this morning. the dow is looking to add right now 55 points, which would put us firmly in record territory. the s&p 500 looking to open higher by eight. take a look at the setup in europe, as euro leaders there start to debate potential caps on bankers' salaries. we're seeing up arrows across the board with italy up by almost 2%.
overnight in asia, we did see a rebound in shanghai. the national people's congress gets under way in china, putting out a growth forecast of a whopping 7.5%. we start off with history in the making. the exact number we're watching for, 14,164.53. that was the dow's closing high back on october 9th, 2007. but how much longer do we have to wait for the s&p to get to its record. that's another 40 points away. >> jcpenney under pressure as a major shareholder dumps 40% of its stake. 10 million shares as the company battles in a new york courtroom over an important part of its turn-around plan. the martha stewart line. google to 1,000. another analyst hikes its price target as google hits another high. apple shares break below 420 yesterday, hitting another 52-week le. >> qualcomm shares popping. we'll talk about that. we begin with the markets, and what could be an historic day here on wall street. the dow is win 37 points of its
all-time closing high. 70 points away from its interday record high. blue chips coming off the second highest close ever. futures on the rise. the dow is posed to surpass its record closing high right after the open here. so, jim, good for main street? will this get people into the markets finally? >> i think that people have lost confidence in the asset class. i think, by the way, if you just go back 24 hours, we were looking bad. and i can't emphasize, maybe i have so much pride in becky quick, what the show did yesterday, but i literally think that buffett injected a common-sense view of why you should buy stocks, and it caught people by surprise. it got people thinking again. and the market did reverse. i believe actually off of buffett's comments. >> offset today by what stan druckenmiller told "squawk." >> i mean, i was tweeting, you were tweeting. i just find -- i've known stan
since the '80s. i think he's absolutely terrific. the difficult thing is how do you get people to be -- to get out of stocks, because one day bernanke's going to have a problem, when qualcomm just gives you great news. or when google -- okay, we can laugh at the $1,000 price target, but not 14 times next year's earnings. but it is a very difficult tight rope. >> listen to what he did say -- we don't have it, i'm sorry. >> you said you should slit your wrists and hang yourself because one day it's all going to end. >> one day, of course, that is true. that is correct. no doubt. >> i remember when chernobyl blew up, and all my clients wanted to sell. because it was -- the cloud was coming our way. and i bought mcdonald's down 4% that day. because the food chain was supposed to wreck mcdonald's, instead they had a good quarter. that's all she wrote.
>> your broader point was, those who are so rich, they don't need to worry about making money. it's easy for them to say this train is -- >> i admit that was a provocative action cramer tweet. but i do think the people who come on and warn us are often at odds with our viewers. i talked to on "mad money" who are trying to make a little money. this is not where they're all in, rolling the dice, forgetting their job, day trading. these people are saying, listen, is clorox okay here? druckenmiller said the 3% yielders are going to be bad. >> jim, do you disagree with the notion that there are people who are forced into buying risk, who don't necessarily want to be buying risk right now? >> no, look, you want to keep up with the averages at all time. but i do think we get good news after good news from companies.
yes, they're not hiring. i know bernanke wants them to hire, otherwise he wouldn't keep the rates so low. but the contrast between a guy i had on last night, the fourth largest real investment trust, number one real estate investment trust from triple net leases on the nasdaq, tenants begging for more space, and that's the real world. and those people are not saying, you know what, i should not lease, because one day the fed is going to be done and there's going to be heck to pay. just don't say it. >> by the way, if there is all heck to pay, and the fed is done, why would you want to get out of the bond market before the stock market. >> if you had a big bond portfolio, why not short treasuries. i think treasuries are the danger. i do not think a stock that has a 7% yield is a danger right here. >> given the fact if the fed is withdrawing, it would be
ostensibly because of the economic growth, which would, of course, in turn benefit the stocks. >> i say to myself, all right, let's go there. buy more germany, zimbabwe. believe it or not, diamonds and gold and masterpiece -- masterwork art, and mansions, expensive housing, all did great in zimbabwe and some of it, of course, was confiscated. but, you know, if you want to go there, if you want to give us a buy more scenario, that we're all going around with money in wheelbarrows, that's fine. >> the last time the dow hit the record in '07, the 10-year was at 4674, far cry from 19. you would expect retracement over time. >> i've been at a trading desk when yields got to 7.5% for treasuries. people said, i've got to short that. that's ridiculous. they were 14 not that long ago. i don't want to say it's the
same old song, because these are really smart people we have on. they've got billions and made a lot of money. but i do remember other yield -- i remember 14%, trying to get people to buy those bonds at goldman sachs. people said that is the most ridiculous piece of paper i've ever heard. it is the most important piece of paper in our lifetime. >> the last high, given what happened subsequent to that, it's hard to imagine it. >> true. i think the question at this point, jim, is some people say the dow is the composite of only 30 stocks. when will the s&p 500 regain its high? >> the s&p up more from the lows than the dow. >> the dow didn't do that as well last year. you look at the components of dow. you have caterpillar up from the march 2009. you could pick them all off. you might think at&t is expensive on an earnings per
share basis. that's fine. >> i don't like talking about the dow at all, frankly, given the components, given the index. we should be talking about the s&p. >> the question is, when will technology participate, because the discrepancy between the performance of the nasdaq in terms of its distance from the record high and the dow, it's all technology. >> yesterday there was -- one of my favorite companies is called tech data. it's a supermarket protect. that was a terrible conference call. because they're saying, listen, shift away from the large things that they can make a lot of money into the smaller factor. a bunch of guys say buy tech data down almost 10% yesterday. and then qualcomm comes in. we had mr. jacobs on last week and he told you everything was great. if you were listening to him and trying to weigh that against druckenmiller, you may have missed. maybe it doesn't matter. maybe a 10% move doesn't matter to someone who's got it all. but to someone at home who says,
qualcomm, i heard them talk, they have samsung, they have a stock i don't want to mention anymore because i've got a ban on it, the next thing i know i just made some money. and that money, go to the bank. let me tell you, go to an atm machine, i never heard a teller say this, that money -- i'm not taking your money, because i know it's all -- you know what they do? they tend to take it, put it in your account. then you get to take a vacation with it. maybe pay tuition bills. the colleges -- i know druckenmiller, all the other people, i still find that when you write a tuition check, they hold it up, look at it, and then they take it. who do these mortals be. >> let me know if that changes, though. >> one day. >> let us know. >> in the fall of 2008, that was the day.
>> that's when you were checking your paycheck and trying to figure out if there was a full banking company behind it. >> jcpenney falling in the premarkets. sources tell cnbc deutsche shopping a $10 million block held by vornado realty. holds 8.5% stake in jcp when the company is back in court, once again. >> back in court. this is fascinating, listen, when bill ackman came after jcpenney, so to speak, and got board seats, he did so in partnership with vornado. this is a real estate company that actually had its start with two guys. >> two guys. >> and they had a huge -- alexander -- >> couldn't afford bloomingdale's, you had to go to alexander's. >> they took that. so they had history there. and of course, they installed mr. johnson. now they're getting out. one question, why aren't they actually selling all of it?
is it because the market simply couldn't handle the sale of that size? >> deutsche bank said we can't. >> my understanding is that it's been an embarrassment to mr. roth who is the ceo over vornado. it's been embarrassment for some time. if you take a look at the dno, it's underperforming under its peers over the last few years. perhaps a distraction. some ask why not do these kinds of public company investments outside of the real estate investment trust itself. and so they're getting out. and doing so in a large way. but not the entire amount of their stock. instead of trying to effect more change at the company. i think that's the interesting dynamic at the company here. >> don't forget, steve roth, every downturn, roth is a winner. so when he makes this judgment, he's the best loss guy, disciplined guy. i think he's writing it off.
that's what i'm thinking. i'm thinking he's writing it off. >> why wouldn't you just get out entirely at this point? if you're making sort of a judgment call, dumping 10 million shares, don't believe in the turn-around strategy, why don't you -- >> i don't know the answer to that. perhaps there are more sales to come. or it's a way to say, well, a little bit of -- blank -- insurance. >> it does remind you of a time when ackman tried to rejuvenate the firm. in part with vernado. this was a big splash that came on "squawk" and said we can do to this retailer that ackman wanted to do to others. >> they'll see each other in the elevator. i think ackman is a tenant in his office space. >> elevator pitch there. >> another guy probably not that happy with bill ackman. they have nobody to blame but themselves. >> we'll know if he's unhappy if he files with herbalife.
loeb not in the top five. >> but that's also partially his performance. $6 billion, $500 million position doesn't necessarily represent the largest. >> we got the performance figure for pershing yesterday. it was -- >> up at this point. >> we're not really seeing -- >> very interesting story in and of itself. canadian pacific still a very strong one. >> the good ones, that's important. >> jcp suffered. herbalife is not suffering that much, but it's still a huge potential risk one would argue with carl icahn having filed, installing board members and the possibility of a short squeeze out there. >> when he exercised the options, weren't you surprised? i think the silver fox always has -- >> they're going to take the
stock in. we'll see. >> i stay on herbalife because, again, the battle of the egos, judge wapner, i'm waiting for an appeal from that particular court. we have martha stewart in court today testifying. i do love martha. >> and the judge. chasing history, the dow taking aim at all-time highs today. we'll stay on top of the blue chips' march to a milestone that could be reached. tracking the fund flows, carl peterman on what this means for the bull run. more look at the futures. wouldn't you love to have this over so we can move on? >> yes. >> "squawk on the street" continues. [ female announcer ] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer.
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the magic number of the day, 14,164 is the record closing on the dow. looks like it will get there at this stage. it's only 37 points away, dow hasn't had a winning streak longer than two sessions since the end of january. it's been a rocky road in the month of february. >> i think that's why there's such skepticism. wow. >> we are keeping an eye this morning on two giants in the tech sector as well, google poised to open at new all-time highs after jefferys raised their price target to 1,000. setting traction in product
listing ads. on the flip side, apple coming off a day which stock fell to new 52-week lows as low as $4.19 a share. the sale of two techs in terms of money flowing out of one. >> the stock that shall not be named, you can buy $1 billion a week. the stock that will not be named is in free-fall still. maybe it breaks today. i can't bear it. i represent america. it's apple that i'm talking about. >> people are saying short sellers are born. >> it's a free fire zone. they're debating. right now they're in serious discussions about doing nothing. google -- i just want to distinguish, because i know you say jokers, fools, the stock is selling at 14 times next year's earnings. this is not like the old days, my friend. where everything was 80 times
revenues. >> that's true. >> google's making a lot of money. >> google's been making a lot of money for a long time. >> kellogg trading higher. that's the market we're in. >> i know. it is the market we're in. >> i sit here and i think to myself, wow, 14 times earnings, with all they do is seem to get stronger. how often do you guys use google every day? >> every day. >> three, five, ten? >> or more. >> and remember, youtube, google drive, or e-mail, not just search, there are many ways you interact with google. google maps. >> i love google maps. >> so do i. >> they have great driving directions now. >> you don't need the little thing anymore. >> that's why the little thing sells. garmin goes down. i am in awe of the mindshare, yahoo! creeping up nicely. when you look at the google
asset, when you think how good it is on mobile, they can charge on mobile what others can't charge. >> they're charging the same to reach a mobile user as a desktop user. they finally captured what was wrong. you can't monetize it. well, hello, they are monetizing at this point. >> it is an extraordinary story, youtube. it could be the 1,000 channel -- wouldn't be surprised to see big name people on there. it is not expensive. i think the kellogg -- johnson & johnson, you've got a very slow growth. kimberly clark. these are all -- >> toilet paper or search, i mean -- >> well, in terms of necessities. >> it's like that thing went away. >> it's hard to disappear $11.5 million or $12 million deal. they fight against samsung having a larger and larger portion of the android prices and more power with google.
they've managed -- >> how about chrome? do you have a chrome? listen, do you remember when it was do you have an ipad? do you have a chrome? >> they're sleek, those things. >> touch screens and the like. >> would steve jobs use a chrome? >> no. >> i don't think so, no. >> i can answer that question. >> no, he wouldn't be buying it. >> no, he wouldn't. he would be inventing a car that drives in water. >> google invented the self-driving car. >> 13 times earnings. i've got a self-driving car? >> yeah. you get uber and they send the car over and it's self-driving. >> cramer is about to give you a head start on what could be a historic day. and for our antique collectors, "the treasury detectives" are on the case tonight. meet one of them ahead of the
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keep an eye on futures. pretty good open here setting up, nice and firm. we'll see if it lasts throughout the day. >> 14,164. that's so big. it is big. >> i know. let's get to the "mad dash" here. cree. >> a disappointor. they bump guidance. they did say, listen, we're going to make sure -- i love it.
there will not be one incandescent light bulb. i have these light bulbs at my house and they have this weird aura twilight thing. >> you've been pounding the table on -- >> i'm not stopping now. this rating -- come on, it should be more like that. you can always slop these things. they did an $8 secondary a week ago. now $10.42. i think there may be a countrywide settlement. this is mortgage insurance that i think is worth $4 to the stock. radiant ain't done yet. for those who think this one's played out, remember where it used to trade. remember what a great business this is. the fha is pulling back. you always have to buy when you buy at home. oh, yeah, the banks. >> that's true. >> mortgage insurance. >> the dow within striking distance of the all-time closing high. the bell is in just over four minutes. [ man ] i've been out there most of my life.
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the dow looking to open at a record high. you're ticking through some of the growth indicators in terms of the markets. all the base metals trading higher today. crude oil yesterday closing above the 200-day moving average. very positive there. nice rallies over in asia. nice rallies in europe. >> the market's a funky place. maybe they reverse everything, and maybe this is one more tantalizing day. >> it's going to be a good day to watch the vix to see if this will hold through the session, yes? >> yes. >> interday. >> yes. there is a tremendous amount of, what i would call as being overstretching some valuations that nobody seems to care about. you can't shoot them down. i've never seen stocks levitate -- like you go into a j & j, which is not growing, merck was up, but it doesn't matter, people don't want to hear it. >> they just want to buy. >> the opening bell ringing on
wall street. here at the big board, alps dog. at the nasdaq, burrson celebrating a 60th anniversary. we are climbing higher here on the dow. as it ticks higher, we're watching the points accumulate. 47 points away from the record high. right now we're higher by about 23 as we continue to watch the stock market open. strength, though, across the board in the financials which is a positive sign. you were pointing out wells fargo, now hovering at 36. just under it right now. >> i think that that bkx, that's the bank index, is still below its high. that would be a crucial thing to watch. we know the financials are so necessary to any state of a rally. >> we're up 30 points. here we go. >> radiant. >> in record territory on the dow jones industrial average. so we have crossed that level. if we could hold that, that would be the all-time closing high. >> you always want to be skeptical, because we all
remember the old days with the dow 10,000 hats. we're not going back to that. >> we have had -- >> 13. >> no hats. >> no hats. >> no capes. >> yes. linda hunt, i can't remember who did that voice. >> yes. >> you point out one of the encouraging things to a long-term holder of stocks. there are no tv trucks outside today. >> no. >> we need that. we need there to be no hoopla. we know when we were here last -- look at that date, october 9th, 2007. was that the single greatest day to sell other than the friday before the crash in 1987? that was the sell date. you don't want to look back and say, we just got another one of those. i think there's building skepticism that is right. we don't want to hear that the eagles are a dream team. that was right. just to analogize. you don't want to dream down.
in sports we would know that as pure chaos, right? that's a team that's about to plummet. so we just want it to be -- oh, that's nice, stocks are going up. >> terms much the next leg of this rally, though, do you want to see the participation of technology of materials? of these sort of more cyclical -- we've had discret n discretionary cyclicals. >> analog devices, texas instruments, intel. i don't know what gets them going. they've got to get going. u.s. steel, whatever is copper, because freeport is so oily. we need to see bank of america back to 18. these are what i'm looking -- yes, we need to see cisco. not just trade at 20. >> apple is going higher today. >> the word for apple's performance over the last six months we would have hit this number a long time ago. we would be talking about the
s&p at record highs. >> yeah. apple is just -- they had a chance to buy back all the stock they wanted, and they just didn't seem to be inclined. i was looking at travelers the other day, they bought back about half their stock. i think fishman is a conservative manager. what do you do with cash when you have a lot? you return some of it to shareholders. when a guy like fishman can do it, why can't a guy like cook do it. >> tim cook is willing to sit on a pile of cash than buy shares at new 52-week lows. you're saying, tim cook is not buying his own shares, why should i buy his shares. >> looks like we've got something working here. >> all-time high. >> okay. anyway, so tim cook, if he doesn't -- if he isn't standing there buying it hand over fist like travelers did, then why should i -- >> why should anybody. why should anybody. >> i don't have an answer for it. i do believe they should buy
growth. the iwatch -- >> you both seem to believe that somehow a decision by mr. cook and the board and management at apple, to return that cash to shareholders in some fashion will be a turning point? >> i think a buyback, yeah. >> i do. >> it's not going to help the company come up with a new product. >> and they should buy twitter and netflix. >> you can go back to microsoft, a debate a number of years ago that they would return cash. it hasn't helped the growth profile of the company. frankly, it hasn't really helped the performance of the stock over time. >> cramer said buy a twitter or do something transformational, then become a stock that dividend holders can buy. if it returns capital to shareholders, then it could
facilitate the transition from growth stock to value stock. get into more stable hands and not hit 52-week low. >> you're asking me for a cultural change in management. >> we've seen cultural change in many -- >> we have. >> you guys, as fascinating as apple is, at 14,207, that only takes out the closing high. that is a new interday high for the dow, which was previously 14,198. the dow has never been higher at any moment than right now. in the history of a 200-year-old index. >> i got in at 1,100. pretty well oiled machine. throughout the whole period from 1,100, and valuations are stretched and you've got to be really careful with stocks and you want to be in bonds. well, i don't know, that's a pretty good move, 1,100 to 1,402. you agree with that? >> yeah. although they've had to keep it at a price of an index because that's the way they started it.
i think money managers out there would be happier to see the s&p at an oall-time high. >> we're within striking distance, not too far off. >> look, this could be a big reversal day. tomorrow we could come in and say that was an island reversal. ever hear that one, island reversal? i know you're a technician from way back. but look, i do feel that there are a lot of stocks that are still inexpensive that are in the dow, whether it be intel, cisco, or microsoft. but i need to see them move -- >> is jcpenney inexpensive? >> when they're cutting estimates like at apple, and at jcpenney, it's hard to put a multiple on the stock. anytime estimates are coming down, it's incredibly difficult to value a stock. apple is not a cheap stock. because the estimates are coming down. if they do faith in the future and have products, you want to buy stock. this is where they are now. it's called iwatch. very funny guy says to me,
iwatch the stock go down. >> here's a look at jcpenney. trading below where the block was priced. >> jcpenney has wi-fi in one of its stores. >> can you also get a cup of coffee there? and free hair cut? >> i think i read in one of these blogs -- i'm trying to be, you know, buzz, get with the program, but they got wi-fi. and i think that pretty much says it all. >> if they lose exclusivity with martha stewart, jcpenney, is ron johnson out? is that going to be a turning point for ron johnson? >> well, i'm using david "time frame which i think is 4 months and 27 dates. >> 24 days. >> i was using business days. >> you know, i don't make too much of this number, but symbolically, jim, it takes you back to everything we've had to overcome, whether it's lehman,
aig, stress test, fiscal cliff, even more recently sequester. >> they've had a lot to say, right? europe, china. lowering the growth rate. communists look like they're taking over there. i just feel that -- this is facetio facetious. but yeah, one day bernanke is going to sell a bond and then it's all going to go away, david, everything. >> it's all going to disappear. >> i have lost so much hair worrying about bernanke and when he sells a bond. who knows what i'll have left. maybe i'll be cool, like michael jordan. >> the money you've made since then is going to make it go down easier is what you're saying? >> it's so difficult to be in a position like us, and say, don't -- or mine on "mad money," don't touch it, because one day there could be nerma nuclear war. i cannot get people out ahead of therma nuclear war. this is my own view, david, that in therma nuclear war i will not
be worried about the price-to-earnings ratio of bristol-myers. >> but the bunker stocks will come in very handy for you. >> hormel. >> spam. >> spam's been tested, right? christmas island? where was that spam? they found it pretty much everywhere. in the depths of nevada during the -- >> how do you get around people who say, all right, record high, food stamp issuance is up. there's an editorial today in "usa today," new heights as fed provides the steroids. this is sort of what a lot of -- >> bristol-myers -- this is done on the backs of workers. companies have not hired. they're still firing. the profits come through. >> it's not reflective of gdp. >> no, it's not. we don't have good small business growth. i think washington has done a lot to make it very frightening to start a small business. you don't know what your health care costs are going to be. you don't know what the taxes
are going to be. there are a lot of reasons why you would not want to start a business and hire people. that is on the cutting edge when you start a business, you do worry about washington. >> a few minutes from nonmanufacturing ism. >> look at this. this thing is really flying. >> on the lookout for new orders. gave us a sense that the economic engine is continuing to fire up. but that data still a few minutes away. do you want to go to pisani? are you there? >> i've been standing here. listen, there was a little stir, 14,200 on the floor. a lot of people sort of came around, slapped each other on the back. a couple of guests here all talking about the new highs. a lot of people come on the floor these days, that weren't allowed on the floor in the past. a lot of educational things going on here. they're here at an important moment here. we're on an interday high. already historic number for the dow. we'll see if we close at the historic high. frankly, folks, that's the important one, the close is what most technicians consider to be
the most important. do you know, it's almost three years to the day since we hit the lows? remember march 9th, 2009, 6,547 is where the dow was. almost exactly three years ago. 6,547. consider that when we're at 14,200. remember what happened there? everyone was thinking the world was going to end. but we went straight up from there. we went to 10,000 by october 2009. 6,547 to 10,000 in less than eight months. that was a gain of roughly 50%. quite an amazing ride. now, in the next hour i'll give you a little bit of a historical lesson on the road to 14,000. we'll go back and mention some of the high points. the important thing is, it's been an amazing run just in the last three years here. how did we get here today? china turned around. remember the mess it was yesterday? china was up 2.3%. europe up 1.5% overall. that's very important. that's what moved us in. ism services, 55 is the
expectation. that's been strong for a while. ism manufacturing numbers were better last week. all of these people, by the way, who come on our air keep saying, it's just the fed. nothing but the fed. the fed is backstopping everything. i would beg to differ. nobody would disagree, the markets will be lower if not for the fed intervention. we are seeing an improving economy, number one, and number two, we're seeing earnings at historic highs, 2012 earnings are at historic highs. projections for 2013, they usually come down, but they're also going to be at historic highs. that is the most important thing about what's going on, with the stock market. there is no other place to put money, partially due to the fed. but that's the most common answer i get here. china gdp, quick forecast in for the year, 7.5%. not as good as 7.8% last year, but in line with expectations. that's why china rebounded and the bottom line is, they are moving. the new china's congress was just concluding here.
they'll spend a lot more on social programs. increasing the deficit, trying to push people out of poverty, less emphasis on exports and infrastructure. different tone for this congress. that's very important. finally there was a lot of discussion on google as the new apple overnight. my e-mail is full of it. you guys were mentioning it. since december, apple's down 28%. google up 17%. jefferies raised the price target today, raised their numbers on google to $1,000, specifically citing the growth in youtube, online advertising growth and the international expansion. guys, we'll see if we can close at a historic high. >> and transports hitting a high. i regard that index as important. let's head to rick santelli in chicago. >> hi, jim. well, of course, the markets are a little bit like sleep walking. we know there's good things in the economy, we know there's some not-so-good things in the economy. the global economy. so let's take it for what it is.
obviously stocks are going up for some good reasons, and treasury yields aren't going up for some fed reasons. if you look at a two-day chart of 10s, you can clearly see yesterday we were around 180, 181. today, we touched 190. we're up one basis point at 189. two-week chart gives you a sense of perspective. we're coming up on yields. obviously the pull-up has to do with equities. let's look at a couple of charts on the euro. if you look at a two-day euro, similar dynamic on all these charts with regard to pattern. yesterday we were trading under 130, around 129.80. today we touched 130.75 and moderated. remember, they have a meeting on thursday, the ecb. let's look at another country that's going to have a meeting, the uk. let's look at the pound versus the dollar. a two-day chart. wow, you can't make this stuff up. yesterday's low pretty much on the nose at 150. today's interday high, pretty much on the nose at 152. if you open that chart up to two weeks, you can see the creep is
in favor of the dollar. of course, we'll continue to monitor as jim happily pointed out, a big day for technicians. it's not only the interday spike, it's how it closes and how it closes relative to yesterday's low. should that be an issue, reversals, key reversals, all big technical issues. jim cramer, back to you. >> so true. we cannot -- you know, book it before you can proclaim it. the latest in energy. >> jim, the last time we rallied to 14,000 in the dow, we set a rally off in the energy market that took oil prices to peak prices, all-time highs. with the new all-time high, are we going to see the same kind of thing in energy. the answer to that, what i'm hearing down here in the pits, is probably not. this is not like 2007. look, in october 2007, people were worried that there was not going to be enough oil. that in fact we would run out. this time there's plenty of oil, plenty of natural gas out there.
and as the dow hit the new record, this time people are not talking about peak oil as an issue. in terms of supply energy, the u.s. is in a much better position than it was back then. i want to point out all the production in the leading top u.s. refiners, they've cut back on their reliance in terms of foreign oil. geopolitical risk is still an issue out there, but the premium isn't as high as it was. we're still going to be watching things in the middle east and also in africa. but they just might notter as much as they once did. of course, the refiners are getting a lot more crude from the domestic market than they were at that time as well. just in terms of price action this morning, we are seeing crude higher, wti above 90. brent crude above 110. back to you. >> thanks very much, jackie. shareholder re volts under way worth at least noting the progress of. given one has a shareholder vote not far and the other don't quite have it yet. i'm talking about dell.
the largest single share hold are other than mr. dell himself, who as our viewers know engage in a private transaction to buy the company at $13.65 a share. silver lake, the leverage buyout firm. saying, you know what, we're going to be the centralized clearinghouse for organizing the opposition, or resistance as we like to say here on "squawk on the street." we're thinking about a musical down the road on broadway, along the lines of less miss, we were singing this morning. we like to do that. here's southeastern, take a look. i know that they've also been selling some shares. they don't have discretion overall. customer accounts, some people have sold. they still own 106 million shares. now sending a letter we want the name and address of every shareholder. proxy solicitor in d.f. king.
if dell's special committee is in conversations with another potential buyer, the likelihood is not. michael dell would be obligated, though, actually to join hands with any other private equity firm were they to come to the fore. but it will be interesting to see what happens here on this very important vote. as the resistance potential lll builds for this deal. they're saying, you're taking an enormous amount of risk as opposed to the risk being on michael dell and silver lake. the special committee as i've said many, many times, did all the right things, it would seem, but it may not be enough. i don't think silver lake has more than 30 cents in them. you could end up being a no or yes vote. we'll see. the other part of it,
interesting, maybe they would want to stub ala clear channel. you actually had an opportunity to participate along with the companies that took it private. probably not happy if you did. southeastern would probably want that opportunity. >> what a bunch of cry babies. stock will be at 10 bucks without bill. >> you may end up with that vote coming. >> yeah. i want ten bucks. is that what they want? >> well, they at least will think the growth prospects, whatever it may be, the opportunity to lever up the balance sheet, nothing saying that the management would actually do that. worth paying attention to. the other vote that we're going to pay attention to is metro pcs. that's april 12th. the record date is march 11th. record date not yet here. mounting opposition to that deal, paulson, schoenfeld. paulson saying, combining intel with pcs. you're throwing too much debt on this thing. don't throw nearly as much debt on it. you'll improve the whole
characteristics of it. you're hobbling it from the outset. one to watch closely as the shareholder vote nears, because we could see this deal voted down, maybe deutschetel will change those terms. just want to put them on people's radars. >> significant resistance. >> too much activism. guys trying to make a buck for you as a shareholder and these guys are not happy. you know what, you can always take steve miller's dictum and take the money and run. >> there are two sides. we had mayo on financials yesterday, who argued he would rather have an activist shaking things up than a regulator coming in and shaking things up, from the top down, yes? >> most certainly. >> if they don't believe they're ttin shake, that they would rather see del lever up, why you would take the cash to take the company private, the down side will be there. >> look, hard to value apple,
use the analogy of apple. numbers are coming down for dell. >> six quarters in a row. ll.it's been a difficult time but he's giving a chance to get out at a nice price. >> we surpassed the record interday, previous record on the dow. right now we're ticking higher here. so 14,230.74 is the new interday high here on the dow as we do look to gain momentum. we've got materials participating, technology participating in a big way. 1% gain in shares of apple. we've got nice gains, qualcomm on dividend increase and buyback, up more than 2%. cisco up 2%. big cap tech participating in the rally. this could be the start of that run for the s&p 500 to its all-time closing high. >> i'm still with rick. i want to leave it. rick santelli saying -- well, it's broken our heart a lot of times. that number you said about the back-to-back, carl, keeps resonating with me. you've got a long day.
3:00. the bears come in. they hit the market. some rumor, whatever. next thing you know, let's see it happen. >> there is a bit of a cleansing effect, though, that just happened here in the first half hour. wouldn't you say? we no longer need to worry about this. >> it's good to get it past us. and i see the broader participation, the drugs doing well, biotechs. there's a lot of growth stocks doing well. i can't remember a time when the transports, the growth stocks, the materials, the consumer product, they're all cooking. that's a rather amazing thing. that's got to be money in. got to be money in. >> yeah. we are just off of actually -- dow up triple digits. a lot more "squawk on the street" straight ahead. coming up, we're all artists in some capacity. some bigger than others. cramer's talent lies in the markets. and he'll show it off with 6 stocks in 60 seconds when "squawk on the street" returns. announcer: where can an investor be a name and not a number?
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the day. let's get the "six in sixty" with jim. jpmorgan on diane. >> i'm looking for stocks that have not rallied to the top. this is a dry boat shipper. they're saying neutral. i think people want to play world trade. >> bernstein likes amazon. >> amazon is down today. the web service business worth $52 a share. >> rbc on jpm. >> jpm, talking about returning a lot of capital. >> one we talked about the other day. >> chart industries. they came out saying we're going to build liquefied natural gas tanks. >> pizza? >> papa john's had a restatement. i feel like domino's much more. but you can see the restatement i believe was minor. >> and -- >> disappointed. suddenly they got it right. i say redemption song. >> a great one. what's tonight?
>> we're going traveling tonight. i am reviewing the travel and leisure stocks. the first time i've liked some stocks. i, too, am looking for stocks not at the all-time high. you're going to like tonight's show. >> see you at 6:00 and 11:00. >> thank you so much. >> when we come back, one of the things that might throw a wrench in today's session, ism services back in a minute. carfirmation. only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz.
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welcome back to "squawk on the street." we have our february read on nonmanufacturing ism. the service sector, it's better than expected at 56.0. and that is the best read going all the way back february of 2012. and if you look at the employment read, and this is really important with the numbers tomorrow and friday, we were originally at -- pull that back up -- we were originally at 57.5. that is now at 57.2. thank you, trader. and so it regressed just a bit. but it's still solidly above 50. melissa lee, back to you. >> and rick, this data is having
an impact on the dow hitting a fresh interday record high. at this hour, 14,241, and ticking higher. we do have strength across the board. all the major sectors participating in the broad-based rally. the financials, the staples, consumer discretionary, health care, transports all hitting new highs in this session. 52-week highs. the s&p 500 meantime is at a five-year high, although still off just about 30 points from its all-time closing high. >> interestingly, one of the other things people are calling gravy about today is that we might have our first three-day win streak in over three months. ending january 25th. interesting some of the names that are playing along today, too. apple for once, even though it's down 12 of 14 sessions, is higher today. certainly not universal to some retailers like jcpenney, down on the day. and amazon. >> shares of hewlett-packard up 1.65%.
a price weighted index given it's still a $20 stock. i think it's been one of the best performers. >> since the last high in october 2007, some of these stocks are really powering the dow higher. home depot for one. the percentage changes. it's been more than a double since the last time the dow was at record highs. ibm up 75%. mcdonald's up 67%. so these are some massive moves, which have really helped us to get where we are right now. >> those are the fact that the best performing dow components since the last tops. >> not going back too far, just this year. >> let's get the road map for the next hour on this historic day for the markets, as we said the douceting fresh record highs moments ago. we're now up 116. for the next leg of this rally, will we need to see technology and cyclicals join in the game. strategists weigh in. >> the tale of two techs, apple's pain may be google's
gain. apple closing below 420 yesterday. but clawing its way back today. is the apple bottom in. and for how much longer can google keep the momentum going. >> jcpenney continues its downward slide as a shareholder dumps 40% of its stake. martha stewart takes the stand. more of the headlines in a few moments. going back to hewlett-packard, david, by the way, since the dow's last record, hewlett-packard is down 62%. >> is that all? >> oh, you thought it would be much more? >> it actually was, until the -- i mean, we saw the lows on this stock not that long ago. but it has had a very significant rally off the lows, below $12 a share, back in, what was it, october of last year. >> yeah. >> all right. want to bring in ben willis at post 9 to see what it means for not just today, but long term. >> good to see i. >> what's being said on the floor?
hats or no hats? >> hats, definitely. but funny little hats. the dow jones is most important to the mainstream investor, not to professional traders. it's great to have the buzz on the floor, to have the mainstream media. another indication that the money flows back into equities. we were second-class citizen for four years. and here we come. warren buffett yesterday with ms. quick. great hit. great way for the world to know that the equities are someplace you need to be. >> we've had eight good weeks of flows in our direction. >> yes. >> our direction. and now the data here, suggesting or confirming what chicago pmi said, and that is that order cycles are beginning to fire up. how much does that mean to the long term? >> i mean, it adds to the theme investors are looking at equities, and the world economy as a glass half full. when the ism numbers, all those numbers continue with readings above 50, indicating they're going to get better. just another reason for the average investor to come back into the equity marketplace. you had a story out of td
ameritrade today about flows and seeing the buy in the dip mentality, adding to the positions in facebook, et cetera. those are all great psychological indicators for the health of the equity market. >> does it matter that the s&p has not yet come back fully? because we're crushing up against important resistance here. you cannot really say the american stock market has really recovered until you achieve that. the expectation would be that there should be some selling on the s&p at that level. >> the temptation has hurt people like me, the professionals who have been looking for that 5% pullback. whether you listen to mark newton with his technicals, or tom demark, suggesting that for the health of the market, you need to have the pullback. we haven't seen it. you're fighting this tide of inflows into the equity market that drive this market, and quite frankly, professionals are waiting for that pullback. it's been a painful trade. >> if you break through it, presumably all the bells go off. >> correct. if you break above that resistance line, you can
continue to go. but for the overall health of the market, for the average investor to be happy at the end of the year, you've had a 7.5% return in two months. that's a great annualized return, no less in two months' time. you need to have -- whatever you want to call it, market maintenance, you need to have that pullback to have that reset. >> so what are your clients doing at this point? are they holding their breath and getting in because you can't fight that, or worried about the seasonality, waiting for a pullback for the health of the market? >> the professional portfolio managers have been putting money to work that the inflows. some of that money, if they have the ability, have been buying protection. there was a good trade in the early part of february by buying the vix. you had a great hedge on it, and a pretty good return with the way the vix increased. depending on the mandates of your funds, if the money's coming in, you have to put it to work in equities. that's why you're seeing this
inflow. if you have the benefit of saying, wait a minute, every indication i have from my professional readers are saying, i can probably buy stocks cheaper if i wait a little bit. that's what we're seeing. >> all right. ben, thanks for coming by. >> pleasure. thank you. >> ben willis. for more on the historic day, let's bring in barry. great to see you. >> good morning. >> you know, in your latest note, you say that the fed policy, your upside is limited. do you still think that's where we are right now with the dow at fresh interday records? >> yes, we do. i suspect that first of all, we had a fairly optimistic outlook for the year thinking we could get 10% total returns. but as your last guest stated, we've already done 7.5% this year. add in the dividend yield, pretty much achieved what we thought was reasonable. part of the reason we didn't think you could have a big upside year, first, you've never
had that when the fed is in an easing mode. '95 is when the equity market returned, after the fed tightened, not before. we do have this issue where the chorus of conscientious objectors like jeremy stein and a bunch of the regional presidents will grow much louder if that reach for yield gets too much more excessive. it's important to keep in mind what's driving the equity market here. in january, it was about growth. and expectations that we were going to -- this was going to be the year that we achieved the escape velocity. the numbers have pretty much put that to bed over the last month or so, and it's no longer about growth, it's about staples and health care and high dividend payers. those are getting driven by the same factors that have caused this reach for yield that, you know, driven high yield indexes to historic lows. so if that continues, and that's really the driver, you will
undoubtedly get more conscientious objectors from the fed. and you'll have a much bigger debate about whether they should be tapering purchases or not. >> i get your point about the sort of defensive momentum in the markets, right, in terms of health care, et cetera. but at the same time, we do have consumer discretionary, today's setting 52-week highs. technology, at least today is doing well. and we may not be getting the best read on technology as an index, because of the weighting of apple and its poor performance. >> no, you raised a couple of good points in there. when with think about the cyclical parts of the market, we have parts of it we like and parts of it we don't like. the parts we like, you're pointing to the technology sector x apple. that's actually done well. if you think about how weak capital spending was in 2012, we were at recessionary levels. it was the weakest capital spending we've had outside of a recession in 25 years. because of public policy
uncertainty, the dynamics of an election year. this isn't an election year anymore. capital spending is improving. we've seen that in the core durable orders. we like enterprise tech. you know, the storage, the software, hardware type names. we don't -- the consumer side we're much more cautious about, which brings me to the parts of the market we don't like, which is anything related to the domestic economy. we think the market's overestimated, or underestimated the impact of the tax hikes, the payroll tax. icsc this morning cut their forecast for a second time in a month. we think you're going to have sluggish numbers for consumer spending through the whole first part of the year. >> that said, barry, that said, isn't it true that we are really not reflecting arguably the true strength of optimism of the bulls on a day like today? and the reason for that is the way in which professional investors, institutions invest now has changed. they put their money into exchange traded products. only a proportion of which is
then sent to the exchange to buy shares. so, for example, over at black rock, they're talking about $47 billion of inflows in the first two months of the year. but only a tiny fraction of that will make its way into the equity market. were that not the case, we would be at far higher levels than we are at the moment on far higher volume, wouldn't we? >> well, i'll tell you, simon, i'm really not in the great rotation camp. and i don't really believe that you will see a big movement into equities en masse until fed policy begins to -- >> but isn't there a huge amount of money that is flowing into exchange traded funds, which isn't making it to the stock market and therefore, we're not getting -- we could have a greater bounce is what i'm really saying? >> perhaps. the only problem with your argument, simon, is that correlation, which should be -- correlation you would expect to be higher if more money is going into exchange traded funds. they're buying the whole index or whole sector, which would
drive correlation up. correlation two weeks ago, three weeks ago was at its lowest level since '06, '07. i think you've seen professional managers taking more risk arndt their benchmark. the retail money flows are definitely into etfs. into these high yielding stocks. and i'm not sure that's an argument that the market would be higher or lower. i just think it's a brute reality of correlation is starting to normalize. things are starting to normalize. but we're still not there yet. >> all right. barry, always great to speak with you. barry knapp. by the way, 2013 s&p 500 target, 1525. more on the history making day. let's bring in now the ceo of cantrell fitzgerald. a big day in the price action. what are your thoughts? >> i certainly think we're seeing money going into the
asset class. and people are looking for solid investments right now. we have a low interest rate environment. people are looking for returns on their money. the stock market's a natural place to gravitate to. >> where do we go from here, in your view? >> i think we're -- in the near future we're going to have a pause. but in reality, i think it's going to be a rotation around the market as well. and the equity space. i do think you're going to have outside returns in certain sectors of the equity market. i think people are looking to exit the fixed income market. although we're in the very early stages of that. and we're in a situation where we have ten-year treasuries at 185. everything is correlated to the treasury market. people are looking for opportunities that are outside the fixed income world. >> where do you see the greatest opportunity from here? >> i certainly think it's still in the equity markets. i look for, you know, some of the areas -- financials have done great. they'll probably continue to do
good with the nim that all the institutions have, being very strong. i certainly look to the technology space where people are looking to put some in. i think there are a couple of interesting plays out there. in general, i think the equity market is pretty solid right now. >> so we're not going to see the typical seasonal sort of pullback in the month of may? no sell in may effect? i'm curious how you see this playing out here? even though this rally you say is solid. >> i think you'll see a couple percent pullback certainly. that wouldn't shock anyone. but from a longer term perspective, i think people are looking for opportunities in the space right now, so that's why you're seeing rotation that's starting to go on in the equities base. which hasn't happened in a while. so this is the formation, again, of the cyclical market we have in the equity space. >> shawn, i wonder if perhaps we are not appreciating fully the very negative sentiment that senior ceos have around america about the state of the budget deficit, as warren buffett said on this network yesterday at 6%
of gdp and arguably medicare and medicaid and social security will be far worse on the demographics moving forward. i was talking to one ceo as a member of the dow. he believes the fallout of writing the wrongs, either cutting spending or raising taxes, will be very negative for the u.s. economy over the coming years. would you agree with him? >> i certainly think we have to fix our own internal house. but if you look at corporate balance sheets, they're in incredible shape right now. and that's what's really driving the earning power right now. i think you'll need to see revenue growth here, and that's the next stage of the market. but as an asset class, i think people look to get into the space. >> hasn't the fed determined they'll have great balance sheets because they ran their borrowing costs to zero. what they're saying again and again is we'll return cash to shareholders rather than create jobs and growth, isn't that one of the reasons why we're at
these record highs? >> i agree. people will have to put their cash to work. they'll look for revenue growth opportunities. you'll have another wave where you'll start to see significant m & a activity over the next year or two. >> shawn, thanks for your time. >> thank you. a lot more on this his tor iks day on wall street. look at the u.s. markets. dow up 117. 14,245.
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high. a level hit before the dotcom crash in march of 2000. about 13 years ago. the composite is up on the year, about 5%. but still underperforming the dow and s&p 500. much of that has to do with apple. we know apple's one of the main reasons the nasdaq is underperforming. but to really gauge the nasdaq 100, take a look at an equal weight index, and it is trading in light with the equal weight s&p 500. much has to do with the outperformance in semiconductor stocks. look at the board stocks like land research, marvel, in rally mode in 2013. speaking to an analyst about this outperformance, he said it's easy to sum up, leads to supplies of inventory and improving economic back drop. and lastly, investors had been modesty underweight this group coming into 2013. so expectations were low. thus making it easier for the
semiconductor players to beat the street. biotech, that's another pocket of strength, thanks to strong drug data. back over to you. >> sema mody over at the nasdaq. a fresh 12-year high over there. the question is, when will technology join the larger equity party. we want to bring in tony, senior research analyst with sea breeze. welcome back. >> good morning. >> does this fire up new enthusiasm for this sector which obviously has had issues so far this year? >> look, i think a rising tide will solve both. technology, if you exit apple, largely in line with the market, we think technology is very inexpensive relative to historical metrics. relative to the market, it's trading at about a 30-year low. so tech stocks are inexpensively priced. you know, we do think the sector is attractive. >> you mentioned x apple. turning apple around clearly
would do a lot in terms of helping the sector. it's up today. you still think it could go lower? >> i do. in the short term, i think apple is at an interesting inflection point. investors have been clamoring for apple to return more cash to shareholders. and apple is basically saying we are examining this issue very closely. and they've created the expectation that they could return materially more cash. if they do that, i think the stock would move significantly. perhaps $40, $50, $60 if they return a significant amount of cash. the converse is also true. they've created this expectation. so if there's no incremental cash return before earnings in april, or if that cash return, increments of cash return is modest, i think you see the stock trading lower. and going in earnings, we think that numbers for the june quarter are too high. the back drop of no cash return and the specter of guidance potentially having to go down
again could push the stock below $400. >> tony, isn't apple effectively a way in which people will fund investments in other areas? they come out of long positions in the same way as gold is at a 3 1/2-year low. at nine times earnings, it is conceivable you could turn on the head of a pin here and head upward if they thought simply the direction would turn whatever that catalyst might be? >> absolutely. i mean, the stock's very inexpensively valued. we think for longer term investors, it offers exceptional value. i think for most investors, apple is still largely owned by growth investors, they really need to see some incremental product, or some incremental upside to revenue. announcements of major new carriers for the iphone could be a catalyst. similarly, the announcement of a low-priced iphone or some kind of converge device, a new product from apple that might blend a tablet and a notebook.
that would renew the prospect for growth. right now, investors are cautious, because apple's end markets, principally the high end of the smartphone market, are facing maturing growth. >> isn't part of the problem with reference to google and the gains that google's made on the back of apple, the density of the news flow that you have to come up with, in order to move the stock, is being determined by someone else? in other words, there's a lot of product announcements for google and apple can't keep up. >> i think apple announcements often carry more than the average weight. and so really, apple, 60% to 70% of its profits are coming from one product, which is the ifoen. so clearly the major announcement for the iphone, whether it be additional carriers or lower priced iphone, because apple is only really addressing the high end cell phone market, those could meaningfully turn the tides for apple. >> tony, thanks so much.
>> thank you. >> talking tech and apple here on "squawk on the street." >> let's go back to another mover this morning. jcpenney, martha stewart back in court for the second day on the stand. courtney reagan is live outside the courthouse in new york city. hi, courtney. >> that's right, melissa, the woman caught in between jcpenney and macy's, taking the stand for the first time this morning in the courthouse behind me. it also happens to be the nine-year anniversary of when her verdict was read in her trial. i was able to ask her a couple of questions about the case. let's take a listen. >> hi. >> what would you like to convey today in court? >> what the contract says. >> are you worried at all about the judge's decision? >> not yet. >> do you have a backup plan if jcpenney is not able to stock
these products? >> that would be against our contract. >> there you heard it from miss stewart herself. macy's showed the important of martha stewart's brand to the home collection. jcpenney owns a 17%, giving stewart's company strong reasons to maintain product lines of these exclusive categories in both. ron johnson revealed at one point they considered buying martha's entire company. and a wide distribution of martha stewart brand of products would be to quote the domestic diva herself, a good deal for everyone. terry lundgren says he hung up on stewart when she used that line on him, to explain what was happening between jcpenney and her. they have not spoken since. martha is testifying right now. i just heard from our producer inside the courtroom that she was in fact banned from doing business until october of 2011 as a result of that prior case. she wasn't involved in the
direct negotiations with macy's in the initial writing of that contract. but she was aware of it. so we'll bring you all the latest as it unfolds throughout the day today. >> as you have been, courtney, thanks so much. courtney reagan at the courthouse in new york city. when we come back, take a look at the u.s. markets here. ism data take us into second gear. up 128. ♪music plays thank you orville and wilbur... ...amelia... neil and buzz: for proving there's nowhere we can't go. but, at some point... giant leaps gave way to baby steps... and with all due respect, you're history. if you taught us anything,
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good morning. history in the making here on wall street. we have the dow at a record high, all the losses of the financial crisis erased. bob pisani has more on the floor. a big day, bob. >> we already hit the interday high. we'll see if we can hit the closing high. the dow industrials, let's go back to october 9th, 2007. we hit the historic high, 14,164. october 9th, 2007. there you see the march 2009 bottom. we hit a 12-year low. march 9th, 2009, 6,547. incredible. but we went straight up from there. one of the most exhilarating
runs i've ever seen in my 23 years at cnbc. we passed 10,000 on october 2009. that, simon, 53% run in less than eight months. then we had the flash crash in may of 2010. but that was really just a little bit of a blip there, before the bernanke speech. august 2010, the markets took off when ben bernanke gave the famous jackson hole speech outlining qe 3. the dow moved 2,000 points in the next five months. it crossed 12,000 in february of 2011. then remember what happened, dropping below 11,000, august 2011. that was the s&p downgrade of the u.s. debt. we also had the european debt crisis at the same time. the dow resumed the advance after several volatile months, passed 13,000 in february 2012. remember, the rest of 2012 was pretty choppy. in january we were up 5.5%, the best month since october 2011. let me just show you in terms of what contribution to the dow
jones industrial average was, the dow is price weighted. ibm the big price monster here. from the march 9th low, ibm has contributed 12% of the roughly 7,500 point gains. caterpillar, 3m, home depot. contributed about one-third of all the gains in the dow industrials. now, in the next hour, i'm going to tackle a very controversial topic, and that is, whether or not we are now entering a sustained bull market. not just hit a high and then move sideways. whether for the next couple years we might have sustained bull markets. that's very controversial down here. we'll talk about it in the next hour. >> i believe we have enough growth resistance on the s&p, at 1,539. for the moment, thank you very much. bob pisani on the floor. >> as bob said, history being made on the street today. who better to bring in as wall street legend, art cashin. >> i thought i was going to have to pay you more to say that.
>> inflation title. >> right. >> yesterday, not only did you correctly call that we might get a monday up, which hadn't happened all year long, today you're citing new tony in physics. >> well, you know, you do get when a body station in motion, stays in motion. we broke through the 1525, 1530 area in the s&p. that is, if you're a cocktail napkin chartist, a potential neckline in an inverse head-and-shoulders, meaning if you thought of somebody standing on their head. so that could possibly count you as high as 1550. the down side is, we haven't seen a burst of volume. i had hoped it might mean new people coming in. i would have liked to see an explosion in volume. the other thing is, we're doing this while carrying fewer 52-week moving highs in individual stocks. maybe only half of them. >> i wanted to ask you about the volume point. a lot of people who are skeptics of this rally will say these are
gains, these are highs being built on lack of volume out there. we talked to edgar denny yesterday on "fast money" and he pointed out that companies actually have gone into the stock market, bought back a lot of stock and they actually put them in. would contribute to the volume numbers. we're not getting a good reading by just taking a look at the board here and seeing how many shares changed hands. >> granted, the number outstanding does change, and that factors in. i would tell you one other simple thing. i sit here and worry about macro economics, what is fiscal policy, what's going on. and then greenhouse put out a marvelous piece last week who said, if you cut through everything, in the bottom of march of '09, since then the earnings and the s&p have gone up 128%. guess what, the s&p has gone up 128%. cutting through all the smoke, it's going to be earnings, and we'll see if we can live with it. marginally disappointed so far in the response. mr. and mrs. america sitting
around that dining room table haven't quite said, gee, marge, i guess we better get back in. >> it may be generational. we wondered that after the break, and the nasdaq back in 2000, art, and we wondered it again after the real break in '08. what do you think? >> well, having done this for nearly half a century, you get a couple of things that you keep looking back on. and i don't want to rain on the parade. i think we've got days more to go. and hopefully higher highs. but many of the traders over the years have developed a belief in what we call the 17.6-year cycle. and that would have called for a beginning of lean years, just when the dotcom bubble broke. and interestingly, we made a parallel high, and pulled back. now we're back to a parallel high again. we'll see how much further we go. the 17.6-year cycle says that you won't have a rocket ride going up. that you will tend to turn
choppily sideways and not make aggressive -- in the fact cycle, you can throw a dart at the wall and anything you hit will go up. in the lean cycle, it's a little tougher. >> last question, if volume, if kitchen table conversations do say, marge, let's get back in, how soon do you think we'll see it? is a new record the starting gun? >> you look for two things. when you break out to the new record, or you break out through key resistance, you look for even the professionals to begin to say, wait a minute, let me cover my shorts. let me add to my position. from the standpoint of the public, i would say you wait two weeks to a month to see if they come in. they've fought to sit at home, read it, watch this program, and say, gee, you know, maybe it's -- we were cautious, i was worried sick but maybe it's time to get in. we won't see any reaction for probably two weeks to a month. >> your advice to people to buy? >> no. i don't think -- it's pleasant we're making new highs and
things are moving along. but to move with the herd, isn't always the safest thing to do. you best think on your own and know what your individual needs are. stick with a good counselor and do what's necessary. >> art, you're our counselor here. thanks very much. art cashin. >> the s&p 500 hitting interday highs. it is at a five-year high. 1540 is the level on the s&p. what a rally we're seeing on the nasdaq. finally the participation of technology. the nasdaq is up 1.25% on the historic day on wall street. we're keeping an eye on all the movers out there. let's go to mary thompson who's got the details on a drugstore on the move. mary? >> melissa, on an otherwise upday, walgreens is off about 3%. this after reporting disappointing february sales numbers after a very strong january. overall february sales down 2.2%. second quarter sales coming in below expectations of wall street. you can see shares off 3.2%
there. isi noting two clients that the company appears to be taking some -- a hit from some of the rivals. cvs as well as rite-aid. back to you, melissa. >> thank you very much, mary thompson. much more coverage of this historic day on wall street. the dow now sitting at 14,263. the s&p 500 just about 25 points away from its all-time closing high. much more "squawk on the street" straight ahead. ct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪
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the dow breaking through record levels from 2007. the banks are still lagging. does that mean the upside is still ahead? kayla tausche has that story. kayla? >> thanks, carl. the darling of the recent rally, worst performing sector since the 2007 market highs. s&p financials down 50% since then. more than any other sector. it's little wonder since the interim brought the crisis that rocked the banks, balance sheets and shareholder base. that wiped out several big banks entirely. of those that made it to the other side, only one, jpmorgan, is in the green since then. citibank of america, goldman sachs and wells fargo all in the red. analysts say the bulk of bank stocks are set to rise from here. goldman sachs the only stock they say will fall. for the universal banks, price targets on average are up
double-digit percentages. the stretch of road ahead could be so smooth for banks, expecting profit growth to span 14 years. a run the sector hasn't seen since the early 1990s. the problem is, everything is relative. even profit growth for 14 years, investors aren't banking on rekoupg all that wealth they lost during the crisis. >> all right. kayla, thanks so much for that. kayla tausche. we have the big news here, of course, a record high on the dow. technology participating, certainly in today's rally. google outperforming again, hitting an all-time high today. but for how much longer can the tech titan continue to move north. the director of research and senior technology analyst at bgc financial. good morning. >> good morning, simon. >> warning shots across the bows of the google run. >> anytime you're at a 52-week high, you have to put out a notion of caution. in the march quarter, if you look for three years in a row,
it started a 10% sell-off in google after the march quarter results. google tends to be seasonally stronger in the second half of the year. >> why is that? >> back-to-school shopping, holiday shopping, and paying more from click prices from google. >> the news flow seems to be changing each day. the latest we have from crunch bases is that they may start a prime service. in order to bring target, walmart, walgreens, safeway products to your door. that's a huge change if they do that, isn't it? >> it is, absolutely. you know, it can be a blessing and a curse. the down side is google has their fingers in a lot of pies. they keep talking about focusing their efforts. their core business is slowing down. if you go back and look at google.com revenue, it was below 20% growth on a year over year basis the last two quarters. ten quarters beyond that it ranged from 10% to 40%. but investors get excited because they see google chasing after new revenue opportunity.
>> more importantly being more like amazon. it capitalizes on some of the recent purchases it's made, doesn't it? >> actually, the concern is that amazon is now becoming the trusted starting point. you don't need to use google. so google is losing the high value clicks. that's one of the reasons why google wants to chase after the position that amazon has. >> so for the people out there who worried they missed out on the google train, there's an opportunity in march for a pullback to -- >> absolutely. i think you'll be able to buy google below $800. >> all right. let's get to the other side of these two tech coins. that's apple here. do you feel like the bottom is in here? >> well, you know, it's certainly starting to feel like that. we've had -- we're seeing capitulation. it's the falling knife. every time you think you want to catch it, it drops down another ten points or so. the valuation is, on a ratio basis, starting to become quite compelling. there's bound to become some
news out of this company, whether it's more return to cash to shareholders or -- >> why do you say there's bound to be -- why do you take for granted something has to happen? >> that's what they do for a living. $137 billion, let's burn it, right, give it back to the shareholders. >> they don't have to do anything, right? >> new products is the nature of what apple does. >> that's the nature of what they do. it's reasonable you're going to see news flow out of this company in the spring time frame. >> what is the -- what is the threshold by which returning cash results in significant run up? does the dividend have to have a 4 handle, 3 handle? >> great question, one i'm asking myself. when the dividend was first announced, the move to the upside of the stock surprised me. i thought it was stronger than it should have been. normally a dividend increase doesn't give you that much of a boost in share price. so if you did a 50% increase in the dividend, you've got it close to $4 a share, that would give you a yield around 3.7%, in
line with high quality corporate bonds. i think that would be appealing. >> the trouble is there may be a disconnect at apple hq. and then trying to build a business for the next decade. and possibly some big projects, that they're thinking about. >> possibly. but again, i think that that cash balance is significant enough. even when you adjust the fact that the majority of that cash is offshore, and less usable. that they would be able to increase the dividend. you know, it's not only the $137 billion, it's the billions of cash flow that they generate every quarter. >> you sound like you're on the verge of upgrading the stock. >> there's upside to my price target. perhaps it's getting more appealing. >> colin, thank you. let's check out defense stocks here. the dfx index close to all-time highs. higher by 1.25%. the stocks hit by the sequester, of course. how it has fared against the dow
during this record run here. jane? >> melissa, the dow 30 companies, only boeing and united technologies are strongly defense, but hardly pure plays. the defense index hovering around the all-time highs. that's the irony, like the dow, and yet the individual names haven't done nearly as well. if we take a look, since the last peak, defense companies have never fully recovered compared to the dow. all of these large names down double digits since october 9th, 2007. lockheed, boeing, general dynamics down over 20%. last year, though, in 2012, it was a flip-flop of that. the dow rose single digits, most of these companies were way up, even with the budget threat at hand. lockheed up 12%, even with the expensive f-35 program. raytheon up 17%. with the sequester at hand, only boeing, which is having its own problems on the commercial side in the 787, boeing the only one
up. the rest are all negative so far for 2013. many of the defense firms were very tepid in their outlook in the recent earnings calls, given budget realities. even though the market knew this was coming, they haven't liked the news so far. the last i checked, all of these major players are up this morning with the dow. back to you. >> interesting. thank you very much for that. much more on this historic day on wall street when we return. heading to the break looking at the u.s. markets. steadily heading higher. look at that, the dow up 150 points. stay with us. [ male announcer ] what?! investors could lose tens of thousands of dollars in hidden fees on their 401(k)s?! go to e-trade and roll over your old 401(k)s to a new e-trade retirement account. none of them charge annual fees and all of them offer low cost investments. e-trade. less for us. more for you.
there is only one component in the red right now. those are shares of merck, i believe. but we are sitting here at an intraday high. 14283. the s&p 500 doing quite nicely, making a stab at its record. it is higher by 1.1% right now. 16.5 points and we're just about 24 points away from its all-time closing high. let's get to the cme group. rick santelli with more what is obviously a big news market day. hey, rick. >> definitely big news. technical analysis, many can
say, you know, people who do charts, i remember an old boss at drexel used to say, at the bottom of the sea there are a lot of vessels that have sunk and everyone has a chart room and inside there are charts. i don't look at it in such a cynical way, though i am cynical. i look at it this way. human behavior is repetitive. there is no voodoo to technical analysis. many things in our lives are repetitive. not just in my lifetime, going back when man started to walk. there are certain patterns about the way humans are constructed. so to that end, of course, we have the dow jones, although on this trading floor, like many, and maybe in many living rooms and in cars where you're listening on satellite radio, training wheels on the bicycle still bothers people, so the nickname down here is, you know, we're half dow jones and half maybe mild jones. no matter how you slice it, everybody will be looking. this is a closing pattern of the dow. in '07, the last top that we
have gone through, a little bit today, but technical analysis, you know,new vernacular, people talk about beta testing, but we used to talk about experimenting a little bit, whatever worked. so many things will be looked at. for many, they will be counting cycles, counting cycles from high to high, whenever that high turns out, from low to low, from high to low, low to high. so they'll be doing cycles. again, traders out there will be counting those psyccycles in ho minutes, seconds, days, weeks, months, because time to a technician is like it was to einstein. it is all relative. a lot of these patterns, it doesn't really matter about time. matter of fact, many of the moves have delayed reactions because some look at intraday, some look at closing levels, some look at weekly closes, monthly closes, annual closes, quarterly closes. and, you know, there is a lot of hedging that goes on too.
when you go through some of these areas, what you end up with is maybe people that were short that put in buy stops, why is that important? because sometimes you get false breakouts. and a false breakout means you go through this key level, we hit stops of people that were short, it gives you the -- what we call in commodities parabollic moves. the other things is on bar charts, when you have various bars, you want to be very cognizant of yesterday's low and high relative to today's low and high and more importantly relative to the close. if you're building momentum, key reversals, all this is super important. and as we all know, whether you believe it is the dow or the mao jones, it still is a historic day and part of the mark set is human, part of it may be board. much more on this historic day in the making on wall street. the dow is now higher by 155 points. 14,282. the s&p not far behind, up by more than 1%.
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♪ fixodent, and forget it. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ latest salvo in that continuing fight between hess and some of its shareholders.
relational investors and activist, 9 million hess shares, comes out in support of elliott yet again after yesterday's announcement from hess announcing a series of significant changes in its operations including the sale of the downstream assets, return of cash or $4 billion repurchasing. they say that we found many responses to shareholders concerns to be misleading, self-serving and defensive. they go on to urge hess to cooperate with associates, appoint all or some of the highly qualified nominees to the board and warn at end of the short letter that other shareholders of hess will overwhelmingly support the elliott associates nominees. those are the nominees from elliott we saw. so this battle continues. relational yet again, saying we're with elliott. carl, over to you. >> dow, awe sa as we said earl
slightly off the high. a slow creepup all day. what is coming up tonight? >> a powerful rally on the nasdaq. we'll have louise yamada give us her take of where we are on the rally, the nasdaq and the dow, and which sectors are poised for the most catch-up in this bounce higher. >> all right. technicals key to watch. some pointed out the vix not hitting new lows today, even though the s&p is hitting new highs. throwing the close into some question, right? it is not an open and shut case by any means. >> we have broken and maintained the breakthrough on the s&p. 1541, which is quite significant. >> all right. keep a close eye on everything here. if you're just joining us, a heck of a morning. here is what you missed earlier on. welcome to hour three of "squawk on the street." here's what's happening so far. >> it was easy to know when qe 1 and qe 2 were going to end. this thing will probably end even though i think qe is going to go on forever, just because
all the lobsters are about to get in the pot. >> tenet is begging for more space. wide variety. and that's the real world. and there are -- those people are not saying i should not lease because one day the fed is going to be done and there is going to be all heck to pay. >> here we go. bells ringing on wall street. >> all time high. >> the dow has never been higher at any moment than right now in the history of a 200-year-old index. >> the dow jones is most important to the main street investor, not to professional traders, but it is great to have the buzz on the floor to have the mainstream media, it is another indication the money flow is back into equities. we were a second class citizen for four years and here we come. >> people are looking for solid investments right now. you have a low interest rate environment. people are looking for returns on their money. so the stock market is a natural
place to gravitate to. >> in the fact cycle, you can throw a dart at the wall and anything you hit will go up. in the lean cycle, it is a little tougher. good morning. we're live at the new york stock exchange on a historic market day. it is a long, strange trip, but the dow setting a record high today. the s&p climbing to a near five-year high. the nasdaq hitting a fresh 12-year high, up 145 on the dow. the magic number for the close, 14,164.53. we look to have that with a comfortable margin. we'll see what happens this afternoon. couple of big stories. sears up sharply after the chairman and ceo eddie lampert buys 1.24 million shares of the company for $55 million. lampert used personal funds for that transaction. jcpenney, one of the few big climbers. stocks down on the nose thews t vornado is selling 10 million
shares. joining us on set today, nick colus for convergex. seems like the big lesson for today is historical where we have been and what it means going forward. what do you think? >> you're right. dow jones industrial average is the first major index we ever created in this country to measure the stock market. and that's its utility, provides a historical benchmark. it has more to do with where we have been, the lows, climb out of the lows, the rise of corporate profitability, fed, qe, all the stories are embedded in the new high. >> so much discussion today about the divergence between what stocks are telling us and what the economy is telling us, right? >> yes. >> gdp to stocks. are those going to converge and who meets who more? >> sometimes i think we expect too much out of the market. we expect it to be the central litmus test for social welfare and employment and everything. and really it is just a measure
of corporate profitability. and by that measure, a new high on the dow and record profits are the s&p type names are very much in sync. i think we are going to seat market move higher because profitability is pretty good. >> the industries leading you to that are ism today? other macro factors or is it certainly the consumption data is iffy on the household front. >> we had a very tough start to the year with consumption because of 2% incremental, social security withholding out of people's paychecks. at the same time, you see a slow grinding move higher for the economy like you are for the market. the two are working very much in tandem. >> do you set targets for the year? >> we don't. we look at it in terms of understanding where the markets are trading and helping our clients understand what to focus on. >> how do you wrestle with what is being written about seems like every day, the fed's involvement, eventual withdrawal, comments from drunkenmiller on our air spelling out, again, a very ugly scenario, not putting a date on
it, but saying this is going to end ugly when it does end? >> entirely possible. the bottom line is if you think the fed is ever going to actually reduce size of the balance sheet, you don't want to own equities over the long term. my perspective as a firm is the fed will be here or higher for a central period of time and as investors, as traders, we play the hand we're dealt. that's this hand today, the fed being an active participant in the money markets and capital markets generally. >> until janet yelin or a chairman himself starts to talk that back, and policy speech, in policy rhetoric, the tepper corollary is in play. >> absolutely. the next important data point will be two weeks from tomorrow when we get next press conference after the fomc meeting in two weeks' time. that's the next chance to see how chairman bernanke portrays the economy, portrays his thought process. i doubt it will change much more where we are today. >> final question, retail participation. does it change once this thing gets displayed across the front
pages tomorrow? >> one certainly hopes so. we haven't seen the retail investor play in this market despite the long grinding move higher. we have seen mutual fund flows turn positive, nice positive 18 billion in january, 2 billion in february, we'll see how march turns out. etf flows are positive. >> well, nice to get it under our belts so we can start having more substantive conversations down the road. nick, thank you for coming in. let's get steven wood, the aforementioned analyst, he joins us on the newsline. good morning to you. >> good morning. >> hard to find anyone who says you got to buy today. we talked to a lot of people so far this morning that say this is good, it may continue, but you don't necessarily need to chase it on a tuesday morning. what do you think? >> i think i would be firmly in that camp as well. this is a broad-based market rally. you've seen the dow approach all time record highs and you're seeing the russell 1,000, large
cap space, russell 2,000, even the russell 3,000 hitting all time record highs. so this is a very broad-based move in equities and we think that, you know, sentiment is probably getting a little bit stronger than fundamentals. hasn't been a huge change in fundamentals. sentiment shifted and you were mentioning earlier asset flows in the equities. one thing that we're looking at is this, you know, cash bleeding off on the sideline and equities. is this a real rotation out of fixed income into stocks that would create two different dynamics. >> yeah. do you believe, are you a buyer of the rotation theory? there is a lot of people who say it is overstated at best. >> i think we're in early days, beginning stages. you were talking earlier about the federal reserve and i think that the environment that we're going to be in for a while is zero interest rate world. and even a hawks versus the doves, the hawks are talking about the size of qe, not ending it. we know the fed will hit a target, 6.5% unemployment, want more than 2% inflation, they
want 4% to 5% nominal gdp. once they hit the targets, they'll take a wait and see. i don't think we'll be in a rising interest rate world for a while. we don't see inflation becoming a dramatic concern. right now i think that an easy environment with the europeans and chinese and japanese beginning monetary easing, not ending. we're in the beginning stages of this. i think right now the federal reserve from an investors perspective is squeezing people out of safe haven assets so it is really what kind of customized portfolio is going to help a person get their goals. >> the market obviously is working well past sequestration, which was a big concern not too long ago. it seems like record highs on the markets are not providing the impetus or the motive for those in washington to do anything substantive over
compromise, right, over fiscal policy. >> i'm right there right now. i'm in the belly of that debate right now in d.c. this morning. and if anything, you say the market doing well and the economy chugging along, no great fix, chugging along, they're taking some of the pressure off. i think the analog in europe is when the european central bank took the pressure off of politicians, they slipped into complacency. what we have seen right now is that politics historically has been about distributing prosperity. now politics is going to be about distributing scarcity. and markets i think are getting somewhat accustom ed to that fact now and these policies do volatile sessions where politicians disagreed so much that they create volatility, markets tend to use that as an opportunity to buy and reprice. >> we spend so much december worrying about an incremental increase in taxes would do to the market and different conversation happening today. stephen, thank you very much. >> thank you. >> stephen wood. stick with cnbc for coverage of the historic market session.
we'll have special programming tonight beginning at 7:00 p.m. eastern time. in the meantime, an update on the fight over martha stewart. the domestic diva herself back in a new york courtroom today, caught in the middle of a fight between macy's and jcpenney. courtney reagan has the latest on that. >> reporter: good morning. martha stewart right now being cross-examined by macy's lawyer ted grossman. we caught up with martha stewart as she walked into the courthouse today. i will warn you, the scene was a bit chaotic. we were able to get her to answer a couple of questions on camera. let's roll it and hear what she said. what would you like to convey? hi, what would you like to convey today in court? >> what the contract says. >> are you worried at all about the judge's decision? >> not yet. i don't think a sentence has been presented. >> do you have a backup plan if jcpenney is not able to stock these products? >> that would be against our contract and i don't think that would be very fair. >> the domestic diva was in a pretty good mood when she
entered court this morning, telling photographers to get the leg when the wind blew open her long coat a little bit at the bottom. now a bit exasperated in court bit line of questioning from macy's lawyer and she still has a full line of testimony and a full day of testimony ahead of her. macy's lawyers trying to get stewart to testify that she does in fact understand her contract with macy's is exclusive, presenting her talking points from october of 2009 macy's board meeting. we're thrilled to be the number one brand in the home store sales topping $200 million after the first two years at retail. we can say the three families of business, textiles, food prep, and decorative housewares are truly exclusive to macy's. who knows what the rest of the day will turn out to be in court, but so far it has been very exciting. the court on a short break right now. martha stewart in the hallway, discussing things with her team, while the judge hears some other business. we'll bring you the latest as it happens. carl, back to you. >> courtney, thank you so much, courtney reagan at the courthouse in new york city.
dow close to session highs, up 152. a lot more on this historic day on the street when we come back. take a look at u.s. markets here, the dow, the s&p up almost 17. and the nasdaq up almost 40. rick santelli is talking to the ceo of trim tabs later on. right, rick? >> i have a real affinity for chuck beeterman. he calls it the way he sees it. smart guy. we'll discuss what trim tabs does or one of the things they do. we'll talk about the flows. five weeks ago we talked about the record january before the month even ended. but we're also going to talk about an internal discussion on my e-mail with all my fellow peers at cnbc. inflation adjusted, notional highs. there is some interesting aspects to this current record. we're going to touch on all of them, bottom of the hour.
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before you drop a big chunk of cash on expensive art or a pricey antique, you probably want to make sure it isn't a complete fake. that's the idea around cnbc's new reality show "treasure detectives" premiering tonight at 9:00 p.m. eastern time. here is a look at what happened when curtis dowling and his team took some extreme measures to find out if a luxury hood ornament was the real deal. >> i want to see how easy it is to artificially age a piece of
glass. this isn't an easy task because it sat on the hood of a car traveling at 70 miles an hour over the years would be chipped, it would be sand blasted. the wind tunnel did what we wanted it to. it successfully managed to age brand-new glass and make it look weathered as if it had been on the hood of a car. this is a tricky one because i can re-create it exactly, so can a forger. >> that's absolutely fascinating. curtis dowling, the star of "treasure detectives" joins us here on set. great to meet you. welcome and congratulations on the show. >> thank you. >> can't wait to see it tonight. something like that, you've been doing this for 25 years. >> yeah. >> do you have a standard plan of attack? >> you got to use the same model when you do it. there is only three things you can use. you got the connoisseurship, professional opinion, and that differs more than anything. and then you got your old new
friend, technical testing. because most of the time that doesn't lie. and there is always a technical test to catch someone else. >> a large part of our audience invests in art, collectibles in general. it seems to me one of the big issues is if you're caught with a forgery, if you have been duped, there is hardly any recourse in the world. >> no, there's not. and even where you buy it from, there is no guarantees with art. that's the thing. you buy a bentley gt, you're going to get guaranteed vin numbers. you buy art it just the word of the guy in the bow tie who talked posh. even if you go to an auction house, they have lots and lots of tricky, naughty little ways of getting out of giving your money back. >> walk me through what else you look at, starting fo ining toni the show. liechtenstein, what is the story behind that one? >> a guy wants a face-lift. he has a lovely younger wife who had all sorts of work done and he wants one as well. he had this on his wall for 35 years. but he was never 100% sure if it
was real or not. he was brave enough to hand it over to me and my team to say is it? so we took it on a journey. and eventually we found a way that we could authenticate it 100%. >> how do you break it to someone when the news isn't so good? >> i guess you do it like a new york cop knocking on a door to say, hello, mrs. jones, sit down, your daughter has been in an accident. you can't apologize. you can't be gushing about it. people come to you because they want the facts and want the truth. it is a bitter pill to swallow and sticks in people's throws, b but that's what you're delivering, the truth which you uncovered. no different than a sherlock holmes book. the truth always shines through. >> a premiere tonight. a favorite episode in the weeks to come? >> i got a couple. we handle a stradivarius violin we wanted to authenticate, is it real or isn't it real?
if we had a thousand episodes, they would all be different because the stories are always different. >> we can't wait to see it. thank you for coming by to give us a preview. >> you're very kind. >> curtis dowling, catch the premiere at 9:00 eastern time and pacific, followed by the premiere of "car chasers" at 10:00 p.m. eastern time. when we come back, as markets hit some all time highs, we'll talk to the founder and ceo of trim tabs. $55 billion, before the break, one more look at the markets near session highs. dow up 147, clearly in record territory. we're back in a minute.
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the reason for the upgrade, barclays sees the earnings in the industry normalizing by 2015. it also points out a couple of positives for each one in the stock, the recent capital raise by radian and the rally on mgic up over 300% as being positive for both of these. mgic is still more risky because of concerns about the company's capital levels. carl, back to you. >> mary, thank you for that. the dow broking through record levels from '07 today. they're hoping this will be a launching pad for broader moves in the equities. >> a number of hedge fund managers i've spoken to about the same reaction, finally. this market has been signaling a move like this for some time, but the big money has been slow to follow as evidenced of fixed income assets and the like. still, a number have down well on the rally. sac capital up 3.4% through february, i'm told.
the flagship at third point, a significant equity strategy, up at 6% year to date through then. today's dow performance could feed on itself, traders say today's move could spare a parallel move by the s&p and the result into optimism may draw in more retail investors for a broader based rally. put together, those two things could give the stock market legs for months to come. one element at play now seems to be the diminishing of the fear trade, the sequester and the ongoing struggles in the european economy are losing their ability to push down equities day to day. one hedge fund official put it to me people are immune to the minor fears and they're more fixate on the major ones. still that didn't stop investors from piling on the shorts at a moment of doubt last night. short interest reached its high e est level in mid-february. one example, you guys, big ackman's pershing square, flat on february, despite being up year to date about 3.6%. and, of course, they have been
very much in the news lately for a massive short they have on herbal life shares. >> that's great color, kate. didn't wait to see if the short interest goes back up as we hit higher levels too. kate kelly at headquarters. to rick santelli in chicago, has some more on what we're talking about today, market records. hey, rick. >> absolutely. thank you very much, carl. i would like to welcome chuck biderman from trim tabs on, frequent guest. welcome, chuck. >> how are you doing, rick? >> good. i really respect your intellect, you write some great pieces, you're a smart guy. so if we're sitting around at a table, and you had some relatives and some of my relatives that aren't really market savvy and watching everything developing, regarding equities, what advice would you give them? should they jump in, stay in if they are in, should they do anything different? most americans aren't into business have third parties doing a lot of their investing. give me your thoughts on all of those. >> as long as they invest -- the
investment public continues to be drugged by free money being given by the fed, prices -- stocks will go up, and so if you want equity exposure, if you want to play the game and hopefully can get out before the last -- the music stops, i would buy portfolio shrinking their floats. 100 companies are shrinking the float only using free cash flow to do that, not borrowing to buy, and that portfolio has been outperforming ever since we launched it in october of '11. other than that, i would buy gold long-term, even though, you know, could fluctuate here. inflation protected securities, we're debasing the currency. at some point there will be a cost to debasing the currency. right now it is only resulting in higher stock prices because we're all -- we're all being drugged. and when the -- >> listen, chuck, let me interrupt you. i agree. on the floor, the joke is dow
jones or mao jones. no matter what we want to say about it, the portion is on the back of decent underpinnings of the economy. not all of it. but if you've been long since march of '09, you can still get the check out of your account, is there any way to protect and be involved for the average guy? you know, that isn't necessarily going to be buying puts or using the s&p or the dow futures for hedging. should they be more diversified? are bonds crazy if you're 55 or over? what is your thought there? >> well, i would only buy inflation protected bonds. if you have longer than a five-year time horizon. at some point in time, we just, you know, and, second, i don't necessarily agree, my data, real time data shows the u.s. economy, wages and salaries is growing less than inflation in february. so that's a negative number. and our estimate of job creation for february is only 100,000 based upon how weak underlying
february income data is. so i think we have record stock prices -- >> real quick, let me interrupt you again. we have been ten seconds left. the big discussion i'm having with many people is, hey, is this a notional high, should it be adjusted for inflation? after thinking about it, isn't that an exercise in futility. isn't the reason uncle ben's programs are doing so well with the inflation trade pushing up stocks is stocks are a discounting inflation mechanism? are they not? >> yes. absolutely. >> all right, that's it. yes. that's the answer i was looking for. chuck, you're a gentleman and scholar. thank you. carl, it is all yours. >> thank you for that. tonight, stick around with cnbc all night for coverage of this historic day. special programming begins at 7:00 p.m. eastern tonight. markets holding on to the broad gains. we'll get the word from the trading floor on what the levels mean for the future and how you should playing the market action.
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the european markets are closing now. >> history in the making for world market as the dow reaches an all-time high, lifting equity markets around the world. europe is higher and asia will be higher as a result of the bounce we had on wall street today. green across the screen with the exception of greece. as the records were broken, so on the intraday chart you can
see how the three biggest stock markets across europe, germany, france, and the ftse 100 are higher. the dax up 2.3%. the dow may have retraced all its losses from the financial crisis, european stocks are not so lucky. look at this chart. we're still mired with the top 50 blue chips for europe, underperformance for the five-year period of 39%. let me remind you, before i hand you back, we have an eu finance ministers meeting in brussels, 27 finance ministers meeting. the uk trying to push back hard against the idea of caps for bankers bankers' bonuses. the uk suggesting it might leave the european union. bigger issue out of the meeting, it looks like the rest of europe is going to give states more time to reach their deficit targets, the austerity will be
less harsh, precisely as a result of the anti-austerity vote in italy. >> you would think you would have to respond to that political move somehow. thank you, simon. the housing sector, large part of the run to new highs in '07 and the subsequent decline. what is happening now as the dow regains the historic levels. diana olick has more on that. hi, diana. >> reporter: while the dow may have been crossing new highs in october of 2007, the housing market was already beginning its free fall. the home ownership rate, which had reached a high of just ever 69% in 2004 was down to 67.8% in the fall of '07. today, it is still falling. we're down at 65.4%. housing starts had come down from over 2 million to 1.2 million in '07. today, the starts are rising from the ashes, but we're still only at a seasonally adjusted annual rate of 890,000. existing home sales, different story. they have fallen from a high of
over 7 million annualized in 2005 to 4.43 million in october of '07. sales are better today than they were then with january's numbers coming in at 4.92 million. good news there. home prices, though, still the story. they have begun their slide from the peak in 2006. today prices are still down around 27% from that peak, but they are coming back. the biggest change today, though, is in mortgage rates. back in '07, the 30-year fixed stood at 6.38%. we're at about half that right now. and mortgage rates are rising a bit. the biggest change is in activity. refinances today are about twice what they were back then. and home purchase activity about half what it was in 2007. carl? >> a lot of good information, diana. amazing to consider where we have been in that sector particularly. diana olick talking some housing today. pisani is talking about not just today's session, but whether or not be sustained. >> we're here, folks, we had an
intraday high. don't write us. it is an intraday high. we did it. the question is, where do we go from here? can we have a multiyear sustained bull market going? that's the debate right now. let me give you the bull and bear part of the thing here. the full screen. here is the first question, what is the tailwinds helping us out? the fed back stopping the economy, that may be number one. depends where you go on the list. the economy is improving. earnings, which i don't think get enough credit, is at an all time high. not just the fed. we are at all time highs. 2013, earnings expected to be up again. records cash on the sideline, both with individuals, hoarding into their bond funds and with corporate america, hoarding their cash haul. no place to put money. i know that seems silly. that's a common refrain from traders. that's partly due to the fed. there is some head winds. a lot of head winds to the new highs going out there. number one, of course, sub2% gdp
growth here. anemic topline growth, a problem for several years. at some point we have to get better topline growth. and there is always the threat that the fed and the ecb could remove stimulus. that's a big issue. so what would move things forward? when i talk to traders, most of the time it involves clearing up some macro issues and a lot of political issues here. so let me point out what will be helping confidence at this point. more clarification from washington. here, some kind of sustained deficit reduction package, over ten years, tax reform and entitlement reform. also helping on extension on the debt ceiling. maybe a two-year extension on the debt ceiling, that would help. clarification on europe. we have to figure out some policy initiatives that are clear road to political and fiscal union. they're working on it, but still moving slowly here. resumption of growth in china, saw the new gdp targets. and the fed able to raise rates without run away inflation. i'm looking down the road for several years. the bottom line is resolution of
these, carl, i think would go a long way towards helping confidence and certainly would be major factor in any kind of bull market. we'll be doing a special tonight, 7:00 p.m., eastern time, i'll be here because i'm pathetic and have no life and i really like this stuff. i really do like this stuff and i'll be here. >> i'm in the boat with you. i'll see you at 7:00 as well as we continue to think of a better name than dow, an all time high, for that show. thanks, bob. for more on the markets, let's bring in scott nations, president for nation shares. gordon, how secure are you that the close will still be that record? >> not that confident, carl, to be honest with you. the fact of the matter is everything is up. europe is up. gold is up. every sector is up. the risk seems to be or the perception seems to be that the risk is to the upside, you'll miss the move, that you're not
going to get the returns, that you're going to lag in terms of performance. but a lot of the guys are saying that's fool's gold. the point of fact, the real risk to this market is to the downside because when it turns, it is going to turn hard and going to turn fast. so a lot of guys are sitting here and saying, look, we have gotten up this high, too quickly, and it would be healthy if we had some sort of retracement now. >> you think, i don't want to use the word imminent danger, but you think a reversal is potentially imminent? >> i don't think it is imminent, no. i think we're going to sort of hang up these levels and maybe have a little bit more upside. we're getting tired here. we're not seeing the volume. we're not seeing the capitulation that everybody is in. at some point, we'll see that. and once you start to see the ramping up of volume, spike of the vix, uncertainty will come back and we'll start retracing and it will be quick. guys better be ready. >> yeah. scott, carbon said earlier he's not seeing the explosion of
volume that would confirm or certainly add weight to what happened today. >> no, but i'm going to disagree with gordon a little bit in that i think with long-term yields below 2%, it is very easy as an equity buyer to be brave. now, he also makes good points. there are a couple of things concerning. the relative strength index, the dow is close to overbought as you would expect because of the second thing. and that is the dow has not taken a step back at all, since it was last below 13,000. but those are reasons to think the dow might pull back to 13,750, now back to 13,000 or 12,000 or a number like that. because, again, with long-term rates at 190, well below 2% right now, it is very easy to be brave. and then you look at things like valuation of the broad stock market below 14 pe, and you know there is no reason to think we're going have some giant unfortunate sell-off, washout of the loss. >> yeah. are you hearing from guys,
scott, who are beginning to rub their hands together over the opportunities to short in the weeks to come? >> i talked to a lot of people for the last couple of months who want to be short the market and many of them are. and when you see some of the news, whether it was the problems with the budget around the first of the year or sequestration right now, or really disappointing gdp number earlier, then it is very easy to think that the market is going to take a giant step back. but those guys have been disappointed all year and i think they'll be disappointed through the spring. >> yeah. gordon, that is the problem, right? >> it is one of them. let's just step back and some of the points bob was making, i want to take umbrage with bob, highly respected on the floor. the wizard of the fed, ben, has done a great job propping the market up, particularly in light of the disasters that happened four or five years ago. question is how does the wizard remove the pin from the balloon without blowing the whole thing
up. it is going to be tricky. it is not going to be easy. sure there is a demand for credit. and as long as there is, there is a floor on the market. but he's got something to do. this thing is starting to get out of balance and he's got to figure out a way to justify the levels we have gotten to, and draw back on some of the stimulus because it just isn't the right thing to be doing here. >> i know. echoing what drunkenmiller said on "squawk" this morning. a big gamble and we don't know if this machine goes in reverse. scott, gordon, thanks, guys. appreciate your time. we'll see what happens this afternoon. executive pay getting capped in europe. what does that mean for bankers here in the u.s.? we'll talk to the comptroller of new york city, john lew, coming up. another check on the markets on this historic day, continuing to hang in a tight range here, up 144, at 14,271.
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not reflecting at all what the broader market is doing. that's a new low at 1515, down almost 10% on a day where the market should be providing some momentum. there is a longer term chart of the past year as we continue to keep a close eye on jcp. tech getting momentum from the dow hitting its historic high this morning. still has a long way to go to fully catch up. john fortt has more on that. ibm is the dow standout in tech, up 75% since the last high. hp is the worst performing tech stock in the dow, down 61%. back in late 2007, hewle hewlett-packard was at the peak of what seemed like a textbook turn around. the stock traded north of 50 bucks. microsoft and intel still smirking at apple's modest sales of its recently launched iphone. cisco owned the internet. and ibm supposedly yesterday's news, about to lose its revenue crowned to hp. fast-forward to today and it looks like this. microsoft and intel trade where
they did then, stifled by a shrinking pc market. cisco has risen, fallen and stabilized. ibm continued to ride high in enterprise tech, flexing its big data muscle. outside the dow, the story of the past 5 1/2 years is mobile and clout. a couple of the worst performing tech stocks in the s&p 500, amd electronic arts seen their core businesses challenged as people move away from traditional pcs and game consoles and toward smartphones and tablets instead. the positive side, companies like sales force, red hat, amazon and intuit that have embraced mobile and clout, they have done well. apple and intuit doubled since october 2007. sales force more than tripled. amazon almost tripled too. so what happens next? ibm's pointing to a new frontier of emerging markets like africa as a gross source. and doubling down on big data. and in mobile, titans like amazon, apple, ebay and google will duke it out to see who can
move through commerce and services in this new mobile world. >> john, strikes me on a day where we're talking a lot about the dow record, i mean, people -- households across the country have stocks. the concentration of stock ownership in your part of the world has changed life for a lot of people and for better. you know how much houses cost out there now? >> absolutely. we just saw a couple of weeks ago mark zuckerberg, sergi brim, creating a science prize bigger than the nobel prize, in historic times as well as wealth creation out here. >> google is at 834, john, thanks a lot. when we come back, the comptroller of new york city john liu weighing on executive pay on wall street and whether it changes now that the rules in europe are changing pretty quickly. one more check on the market, dow up 144. we're back after a break.
european union ministers are meeting today to discuss banker bonuses that could cap at a maximum of twice the salary. john liu is the new york city comptroller and joins us this morning on the newsline. welcome back. good to have you. >> thank you. good to be on. >> i wonder if you look at some of the cap proposals out of europe and think they have gone too far. >> in new york city, we have been very active with regard to
exercising our shareholder rights to rein in what we consider some really excessive executive pay packages out there, toptives of corporations whether they be banks or other that have raked in huge bonuses, even as share prices have suffered. and so i think what is happening in europe is a sentiment that i think is being felt worldwide where shareholders and the public, including our pension funds, are upset and frustrated that the top executives are in many cases rewarding themselves with huge pecuniary gains where investments have not done so well. >> how do you balance that, though, or remedy that, if you think it needs remedying, and also keep new york competitive for a center of banking around the world? >> i think that there are plenty of places around the world that will remain co i think even europe will stay competitive. what this does is it just sends
a very strong message that there has got to be more accountability, more alignment between executive compensation and actual company performance. take a look at what happened, what was just passed in switzerland, where they didn't necessarily cap the bonuses or the pay packages, but they required shareholder approval, investor approval of these packages, so that the management desires are aligned with investors and shareholders. >> yeah. i wonder if you think the caps themselves as a tool are a little too much like a bludgeon. there are a number of ways you can attack it. you talked to banks about claw backs. is a cap the method with which you would rather operate or are there other ways around that? >> we have been active with exercising our shareholder rights. for example, with jpmorgan chase, with other banks as well, just to say that, look, we want executive compensation to be aligned with shareowner and investor interests.
the caps have been criticized by some of the leaders in europe as being too onerous. some of the corporate leaders say, we'll just increase our business pay package. all of that is a knee jerk response to what is a true problem right now that is happening worldwide, that corporations, in many cases the huge banks are getting out of control with the top executive pay packages. and the investors and the general public are not seeing any reason for that, because they're not benefitting. >> is there any part of you that as a representative for the city sees these measures going into play in zurich and london and thinks, well, maybe there is some banking jobs that the city might benefit from on the margin as a result? >> well, so we have seen it both ways, right. when some of the financial industry reforms as proposed by president obama and ultimately passed, there were all sorts of threats that banks and financial
companies would leave new york city for other destinations, well we're now seeing the same kinds of frustrations in other parts of the world. now in europe, that echo some of the public sentiment and frustration we have here in america. i think this is a global phenomenon that we'll continue to see more of. at the end of the day, i believe it will create stronger corporate governance, better alignment between top executives and the people they work for, namely the investors and shareholders and create greater overall wealth. >> yeah. that is certainly the goal we're all after. john, thanks so much for coming to the phone. good to talk to you again. >> always a pleasure. >> john liu, comptroller of new york city. stick with cnbc all day for coverage of this historic trading session as the dow hits new highs. special programming tonight begins at 7:00 p.m. eastern time. as the dow sits still above that record high, the s&p climbing to a five-year high. nasdaq set a fresh 12-year high. we'll talk to the chief investment strategist at pnc.
he'll join us after the break. how we play this rally at this point. back in a minute. mallon brothers magic? watch this -- alakazam! ♪ [ male announcer ] staples has always made getting office supplies easy. ♪ another laptop? don't ask. disappear! abracadabra! alakazam! [ male announcer ] and now we're making it easier to get everything for your business. and for my greatest trick! enough! [ male announcer ] because whatever you need, we'll have it or find it, and get it to you fast.
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pnc asset management talk about what we do from here. good morning. >> good morning. >> is this something you chase? >> i think -- i don't know i would necessarily chase did. i would hope already people are benefiting from it. i would say if you're not in the right asset allegation, if you don't think you're in the right spot to hopefully keep your purchasing power, grow it over time, that's the way we think about things and honestly to have a chance at doing that, i think you have to be in equities, then in a way you have to think about chasing it. at least starting to move in there. >> a lot of discussion about obviously whether macro numbers are going to start to back up what the market has done this year. 7%. a div hike every other session. some argue that leads you to believe that corporate executives, if you trust their management, feel that order cycles are strong enough to where they can afford to pay a little back to shareholders. do you agree? >> i think we thought all along the secondf